Prepared remarks
Thank you, Michelle. Good morning, and Happy Halloween, and welcome to Carlyle's Third Quarter 2025 Earnings Call. With me on the call this morning is our Chief Executive Officer, Harvey Schwartz; Chief Financial Officer and Head of Corporate Strategy, John Redett; and incoming Chief Financial Officer, Justin Plouffe. Earlier this morning, we issued a press release and a detailed earnings presentation, which is available on our Investor Relations website. This call is being webcast, and a replay will be available. We will refer to certain non-GAAP financial measures during today's call. These measures should not be considered in isolation from or as a substitute for measures prepared in accordance with generally accepted accounting principles. We have provided a reconciliation of these measures to GAAP in our earnings release to the extent reasonably available. Any forward-looking statements made today do not guarantee future performance, and undue reliance should not be placed on them. These statements are based on current management expectations and involve inherent risks and uncertainties, including those identified in the Risk Factors section of our annual report on Form 10-K that could cause actual results to differ materially from those indicated. Carlyle assumes no obligation to update any forward-looking statements at any time. In order to ensure participation by all those on the line today, please limit yourself to one question and return to the queue for any additional follow-ups. And with that, let me turn the call over to our Chief Executive Officer, Harvey Schwartz.
Thanks, Dan. Good morning, everyone, and thank you for joining us. We delivered another strong quarter of results, as we continue to execute our strategic growth plan. For the third quarter, we delivered FRE of $312 million and now have generated $946 million year-to-date, up 16%; record AUM of $474 billion, up 7% year-to-date; organic inflows of $17 billion in the quarter and nearly $60 billion over the past 12 months with significant capital coming from credit, secondaries and global wealth. With this momentum, we feel confident about exceeding the financial targets we updated last quarter, which included full-year FRE growth of approximately 10%, up from our prior outlook of 6%, and full-year inflows of $50 billion compared to our prior outlook of $40 billion. Before I dive into more specifics of the quarter, I'd like to address the macro environment. As we look across markets today, this remains a somewhat complex, but quite resilient environment. While the markets have been impacted by ongoing headlines related to policy shifts and geopolitics, the underlying health of the global economy continues to be strong. Inflation has moderated, balance sheets are healthy, and overall, consumers are still spending. With official government data delayed due to the shutdown, earlier this month, we released Carlyle proprietary U.S. economic data. These indicators are derived from our portfolio of nearly 300 operating companies and more than 700,000 employees. These insights provide one of the few real-time views into the economy, steady EBITDA growth, continued investment in technology and AI infrastructure, and resilient consumer demand. Turning to credit markets. There's clearly been a lot of focus here over the past several weeks. To date, our own market and portfolio data are not signaling any broad deterioration in overall credit quality or systemic risk. Consistent with the economic data I just walked through, fundamentals remain pretty solid and credit events have been idiosyncratic. Of course, the credit cycle is evolving, as it should, repricing where necessary, but again, not flashing broad stress. Capital markets activity has meaningfully accelerated. Announced M&A volume was up more than 40% year-over-year in the third quarter. IPO volumes are up 60% year-to-date with increased activity during the quarter. Now turning to our global private equity business. We've capitalized on an improving transaction environment, returning capital to our limited partners. Over the past year, we have returned $19 billion in capital to investors in global private equity, 150% of the industry average. Note, this does not include $5 billion of signed transactions. Our momentum internationally continues. In Japan, we announced the successful IPO of Orion Breweries. This marks a positive indicator for the broader IPO market and is another important milestone for our team in the region. In Europe, we recently completed the sale of Calastone and announced the sale of HSO. Lastly, in private equity, we recently announced the EUR 7.7 billion carve-out of BASF's coatings business, leveraging our global industrial platform and deep carve-out expertise. In the past 20 years, Carlyle has done 19 industrial corporate carve-outs with an average IRR of 25%, another great example of the unique operating skill set we bring to our investors. In Carlyle AlpInvest, the team continues to deliver exceptional growth with FRE more than 80% year-to-date. Last month, we closed our largest-ever secondaries fund of $20 billion, further scaling the business. We recently closed a $1.25 billion publicly rated, GP-led collateralized fund obligation, the largest of its kind to date. This underscores Carlyle's leadership and innovation within a rapidly expanding segment of the marketplace. We also recently completed a $550 million credit secondaries continuation vehicle, reflecting the evolution of our business across newer asset classes. Carlyle AlpInvest is a market leader at the forefront of an industry with strong secular and cyclical tailwinds. In Global Credit, our platform continues to scale. During the quarter, inflows into our asset-backed finance strategy were almost $2 billion, highlighting the continued demand for private investment-grade assets. Our strategic approach to insurance solutions continues to pay dividends across all aspects of our investment management capabilities, including our partnership with Fortitude Re and with our third-party insurance clients. Justin will get into more details about Fortitude Re, but insurance remains a key driver of growth for Carlyle, and we continue to see momentum across the platform. Finally, moving on to Global Wealth, our momentum remains strong. When I first joined Carlyle, we were attracting about $300 million per quarter in evergreen wealth inflows. Today, we're running at 10x that level at $3 billion of inflows, our best fundraising quarter in Global Wealth ever. To be successful across all aspects of wealth, retail, and retirement, you need experience, scale, brand recognition, and diversification. Part of our strategy is partnering with extraordinary brands, like our recent announcement with Oracle Red Bull Racing. This marks the first-ever private markets partnership in Formula One and aligns directly with our long-term global wealth strategy to reach new clients and deepen engagement in key markets. Over the last 2.5 years, we mobilized quickly to capitalize on the growth of private markets and retail. We continue to invest heavily into the business, adding resources and platform partnerships to drive growth. To wrap things up, we are well on our way to exceeding our financial targets for this year and have very strong momentum heading into 2026. With that, let me turn things over to Justin.
Thanks, Harvey, and good morning, everyone. Q3 was yet another strong quarter, consistent with the long-term growth trajectory we've established. We generated $368 million of distributable earnings or $0.96 per share. Year-to-date, distributable earnings totaled $1.3 billion or just over $3 per share, up 10% from last year. Fee-related earnings were $312 million for the quarter, up 12% year-over-year. This increase in FRE has been fueled by organic topline growth. For Q3, total fee revenue increased 11%, and year-to-date, a 13% growth rate represents our fastest pace of growth in the last 3 years. Roughly 55% of firm-wide FRE now comes from Global Credit and Carlyle AlpInvest. That's up from about 25% just 5 years ago. FRE margins remained strong at 48% for the quarter and year-to-date, exceeding last year's record of 46%. Capital markets and transaction fees were $32 million, up almost 20% year-over-year and have more than doubled over the past 12 months. As we said throughout the year, our FRE growth is entirely organic and reflects the scalability of our model and operating discipline across the firm. We are on track to exceed our full-year target of at least 10% growth in FRE while continuing to invest for the long term. Let me turn to a couple of highlights for our businesses. Carlyle AlpInvest delivered another excellent quarter, raising $6.3 billion of capital, bringing the year-to-date total to more than $15 billion. Third quarter inflows were driven by both institutional demand and strong momentum in our global wealth products. AUM at AlpInvest now sits at $102 billion, up more than 20% year-to-date. FRE at AlpInvest now represents 23% of Carlyle's FRE, about triple the level from just 2 years prior. Global Credit generated nearly $10 billion of inflows this quarter, and over the last 12 months, inflows have totaled $31 billion, helping lift total AUM to $208 billion. Global Credit AUM now comprises 45% of firm-wide assets and has grown at a 33% CAGR over the past 5 years. And Global Credit's FRE is now nearly one-third of Carlyle's total. Our Global Credit business is comprised of a diverse set of platforms that deliver attractive risk-adjusted returns for our investors. Our $87 billion insurance solutions platform is anchored by our strategic partnership with Fortitude Re and has been quite active over the past few months. It closed its $4 billion reinsurance agreement with Unum, its fourth reinsurance transaction this year, issued an inaugural $500 million funding agreement-backed note, and recently launched a reinsurance sidecar focused on driving growth in Asia. Together, we believe these initiatives will lead to more than $20 billion of new AUM in the intermediate term. Our leading nearly $50 billion global CLO platform had inflows of more than $3 billion in the quarter. Credit quality remains strong, and the business has recently been recognized for having among the best performance across all U.S. CLO managers this year, with defaults running well below the industry average. Our $13 billion direct lending platform has been growing at a 20% CAGR in the past 5 years. We believe the market opportunity for direct lending will continue to grow, and we are continuing to invest in this platform, adding resources across leadership and origination. Credit quality remains healthy across the portfolio, with realized losses running at an average of just 10 basis points per year over the past decade. Our $10 billion asset-backed finance business raised $2 billion just this quarter, and our leading $20 billion opportunistic credit strategy continued to deploy its third vintage fund and is quickly approaching its next fund raise. Shifting now to Global Private Equity. Over the past year, we have attracted nearly $9 billion of capital into our GPE strategies. And today, we have $40 billion of available capital to deploy across the platform. We're excited about our growing transaction pipeline as we head into the fourth quarter, including the recently announced EUR 7.7 billion transaction with BASF in partnership with the Qatar Investment Authority. We also have nearly $5 billion of announced exit transactions that we anticipate to close in the coming quarters. While Q3 was a lighter realizations quarter, we expect a significant step up in Q4. In addition to this, as you may have seen, one of our U.S. bio portfolio companies, Medline, filed a registration statement with the SEC in connection with the proposed IPO. We remain excited about the future of Medline and congratulate the management team on all they have accomplished so far. In Global Wealth, our evergreen vehicles continue to scale quickly. We currently have more than $32 billion of evergreen capital, and we raised $3 billion across our evergreen wealth products this quarter. The $6 billion raised over the past year reflects a 90% growth rate from the same period last year. Notably, our new Carlyle AlpInvest CAP solution in partnership with UBS saw strong demand in its first full quarter and has already surpassed more than $1 billion in assets. Finally, I'd like to say a few words about the state of our balance sheet and capital management activities. During the quarter, we took advantage of strong debt markets and issued $800 million of 10-year notes at 5%. This extends the duration of our liabilities and leveraged our strong credit rating. This capital provides additional flexibility to invest in growth initiatives in the coming years. We also repurchased over $200 million of stock in the quarter, reflecting our conviction that Carlyle shares continue to be an attractive investment. We are disciplined and opportunistic when allocating capital, balancing share repurchases with investments to drive future growth. Our balance sheet is strong and well positioned to support our organic initiatives and the firm's long-term financial flexibility. To summarize, our third quarter results highlight continued growth, earnings diversification, and operating momentum across the platform. We're executing well, scaling efficiently, and delivering attractive results for both shareholders and investors. I look forward to meeting and working with all of you more over the coming months. And before we get to Q&A, I'd like to hand things over to John for some concluding thoughts.
Thanks, Justin. Good morning, everyone. Let me make a few points on the progress we've made on our strategic plan over the last 2 years. We grew AUM 25% to nearly $475 billion. In the last 12 months, we grew FRE more than 50% to $1.2 billion. Not only did we grow FRE, we improved FRE margins by over 1,200 basis points. We overhauled our capital allocation and compensation strategy. We returned more than $2 billion in capital to shareholders through dividends and repurchases. We also implemented a strategic update to our compensation strategy to increase alignment with all stakeholders. This allowed us to pay more carry to our employees and more fee-related earnings to you, our shareholders. We overhauled our global wealth strategy. As Harvey said, we increased our inflows 10x. And lastly, our focus on capital markets has clearly generated momentum. We have more than tripled our revenues over the last 2 years to almost $240 million. The positive momentum we carry into 2026 is the direct outcome of the extraordinary work of our people. I'm excited to begin my next role, leading global private equity, a business with world-class investors and significant momentum. With that, let me turn the call over to the operator for your questions.
Questions and answers
And our first question will come from Brian Mckenna with Citizens.
Looking at inflows for the quarter, it was noticeably lighter in private equity, but credit and solutions exceeded expectations, showing strong momentum. Could you discuss the outlook for inflows by business as we approach year-end? How do you view flows throughout 2026 and the various drivers influencing them? Additionally, do you have any insight into potential larger insurance transactions that may occur in the upcoming quarters?
Thanks, Brian. It's John. Look, we feel very good about where we are in terms of inflows. This is an area where I think we have tremendous momentum and really reflects we have strong investment performance across the firm. And I would say client engagement remains positive and remains elevated. So $17 billion in the third quarter, obviously, a very strong quarter; it's nearly double the third quarter from 2024. If you look at kind of an LTM basis, we're $60 billion, and year-to-date, we're around $45 billion. So we feel good about the revised guidance that Harvey alluded to in his script, which we provided last quarter, which was around $50 billion. Again, we're at $45 billion year-to-date. We obviously had a very strong quarter in credit and AlpInvest. Harvey talked about how we closed on the secondaries platform, where we raised $20 billion, but we had a really strong quarter without any real private equity funds in the market. So I feel good about the diversification that's driving this growth. So overall, I'd say in terms of inflows, we have tremendous momentum going into the fourth quarter, but more importantly, going into 2026.
And our next question will come from Alex Blostein with Goldman Sachs.
Justin, welcome to the call, and John, congrats again on the new role. Harvey, maybe just building on that a little bit. You alluded in your prepared remarks, in the script as well, just around the strong momentum you guys think for 2026. Maybe expand on that a little bit. What are the key top-of-the-house priority in terms of growth for next year? What do you find to be most needle moving? And what do you guys ultimately that could mean for management fee growth into '26?
Great, Alex. At this time, the momentum for the firm feels better than ever. This applies to global client engagement and the strategic execution of our team, covering all aspects of the firm. You can see this in solutions, the wealth channel, and across credit. While it's a quieter year for private equity and fundraising, the team's performance has been outstanding, returning 150% of the average capital. Looking ahead to 2026, demand for capital is expected to be quite high, which should lead to good deployment and great opportunities. We see potential in nearly every part of the platform. In credit, we're quickly building the asset-backed business, and there will be more activity there. The insurance pipeline remains strong, and our engagement with insurance clients continues to grow as they invest in private credit. The team has done an excellent job. Our two flagship wealth funds, the evergreen funds, are up, and CPEP will be in the market next year, providing another wealth flagship vehicle for our investors. Overall, whether viewed through the client perspective or specific business lines, I feel very optimistic about the momentum, flows, and growth. The capital market still has substantial room for growth, which will be tied to activity. The pieces we've been putting in place over the last couple of years are starting to show results, and I want to acknowledge John for his leadership and collaboration in this process. We truly believe we are only at the beginning of this journey.
And the next question will come from Glenn Schorr with Evercore.
So I'm curious, you had a lot of good things to say about the forward momentum in realization pipeline, and all the banks are super supportive in the deal environment coming through. So when you go through your comments of your $5 billion of announced transactions, I don't know if you can help us a little bit on timing with that. But fourth quarter better than third quarter, Medline IPO happening, I guess my question is if we could peel back that onion a little more because I think that's the part of softness in the quarter and just a light realization quarter. And then, as you move into next year, I think that's where the extreme bullishness on the bank's part was, as we head into early '26, does your forward pipeline align with that? And then, again, trying to get at what some of the other questions get in that is what does that mean for an FRE story for next year? This year, you beat your 10%, is it shaping up to be a bigger story than that next year?
Sure. I think that was 4 questions. Glenn, I just want to point out you're violating Dan's rule, but we're going to address it all. So I'm going to ask John to talk to the extreme bullishness in the pipeline. One thing I will say is that's not a quarter-to-quarter thing in our business, and so I think people should understand it. But John, why don't you give a little more color on how we think about that pipeline, monetizations and realizations?
Yes. I want to emphasize what Harvey mentioned earlier. Our management team takes a multi-quarter view rather than focusing on quarter-to-quarter performance. This is typical in the private equity sector, where the timing of deal closures can be unpredictable. Taking a broader perspective, our management team and our investors have been highly focused on performance, and we are very satisfied with our investment results. Our investment teams have concentrated on realizations, which have increased by 35% over the past year. In global private equity, where we have most of our carry funds, we have returned almost $20 billion in the last year, which is 30% more compared to the previous period. As stated by Harvey, as of the third quarter, our performance in Global Private Equity is 150% above the industry average, making us a positive outlier. Our interactions with investors are also very positive. Regarding your question about the pipeline, in our U.S. private equity sector, we have returned more capital than anticipated. Since the end of the third quarter, we have completed $1 billion in transactions, including the successful Calastone deal across several funds. We are also set to announce and close another deal today in our U.S. private equity sector. The $4 billion worth of deals that are signed and awaiting closure does not account for the Medline IPO, which we filed for publicly on Tuesday. While I cannot guarantee that all of this $4 billion of pipeline will close in the fourth quarter, a significant portion likely will, though some may extend into the first quarter. We are pleased to be returning more capital to our investors in private equity than we are investing, which is a positive sign given the current environment. Looking ahead to 2026, our deal teams are very active in both deploying capital and realizations, and the pipeline, including the Medline IPO, indicates strong momentum for our business.
And the next question will come from Bill Katz of TD Cowen.
Okay. Maybe just a 2-part. Just to want to make sure I understand the math, if it's $4 billion to $5 billion of announced transactions, is the typical MOIC 2x to sort of think through the realization opportunity? And then a broader question is just as I think about you getting towards the end of your repurchase activity, can you maybe refresh a bit on capital management priorities? How are you thinking about maybe where the stock is trading today versus any kind of inorganic opportunity now that the core business has stabilized?
It's John. We are approaching the completion of our $1.4 billion authorization, having repurchased $200 million in the last quarter. Year-to-date, we have repurchased around $500 million and expect to buy back a similar amount in the fourth quarter. More broadly, our approach to capital allocation includes several strategies. First and foremost, we prioritize investing in our businesses for growth, and we are dedicated to that. Whenever possible, we will invest capital to enhance or achieve growth. Additionally, we return capital to our shareholders through dividends and share repurchases, and our recent repurchase activity indicates that we still find our stock to be an appealing investment. Lastly, we also consider inorganic opportunities, but our primary focus remains on driving growth across all areas.
And the next question will come from Steven Chubak with Wolfe Research.
Welcome Justin to the call. So I did want to ask on the FRE growth just looking out to next year. I recognize you're tracking above the 10% year-on-year guide. You spoke of the strong momentum heading into next year. At the same time, you do have some headwinds just in the form of elevated catch-up fees that may not repeat, as well as the fee rate step down from CP VII. So just wanted to gauge your confidence level and the ability to drive FRE growth next year, even in the face of some of those headwinds, and speak to some of the building blocks that support that view.
We feel very good about the momentum across the platform. Whether it’s capital markets, insurance flows, investments in credit, or the wealth channel, we see strong growth. We also anticipate a significant increase in private equity flows next year. Overall, as we approach the end of the year, the momentum feels stronger than ever.
And our next question will come from Brennan Hawken with BMO.
The credit flows were really strong this quarter. But actually, the fee rate looks a little bit light versus my expectations. Was there anything to do with timing on those flows? I know sometimes that can kind of skew the averages and cause the fee rate to look a little wonky. Did the flows come in at a lighter fee rate with the mix? Or was that fee rate impact more of a timing thing?
Yes. Thanks for the question. It's Justin. Look, I think some of that might have been skewed by some of the insurance transactions, where the fee rate can be a little bit wonky. But overall, we have great momentum across credit. We're up 18% year-to-date in fee revenues. We're up 28% year-to-date in FRE. And we really see broad-based momentum. It's not just one business, right? Asset-backed is taking in capital significantly. Our CLO business is really hitting on all cylinders, having another great year. And we're seeing really consistent and strong flows from wealth as well with our CTAC product and our BDCs. So quarter-to-quarter, it sort of just depends on the mix, but really every part of that business is doing well, and we're really excited about the momentum we're going to carry into 2026.
And our next question will come from Dan Fannon with Jefferies.
So $3 billion of wealth flowed in during the quarter, which is quite strong. Can you discuss the diversity of those flows? You clearly have momentum in that business, and I believe you mentioned a product that might come to market next year. Could you elaborate on the product roadmap and how you envision it evolving as we approach 2026?
Yes. As we discussed during the call, flows have increased tenfold since the new management team took over a few years ago. What we're observing now, and I believe it's still early in this process, is that the strategy is coming together. The main components of that strategy include three flagship funds: CTAC, which focuses on credit; our Carlyle AlpInvest Solutions business; and CPEP, which is set to come into prominence in 2026 within the private equity sector. The mix has been quite favorable. CTAC has been available longer and has been a consistent contributor. Additionally, we're seeing significant growth in Carlyle AlpInvest Solutions, particularly through our partnership with UBS. I'm very optimistic about the global momentum we're building. Each of these components enhances the others, leading to exponential benefits across our strategies. Our brand and relationships with advisers are crucial in this regard. We've been committed to investing in various areas, including human resources and product development, as well as our collaboration with Oracle Red Bull to strengthen our global presence. You can expect to see sustained momentum in this business and continued growth at a solid pace.
Okay. And our next question will come from Ben Budish with Barclays.
I had maybe another 2-parter on your sort of public markets exposure. Maybe just in the quarter, it looked like there were a few public investments that were weighing on your private equity performance. Just curious if you could address, is it sort of timing-related end of quarter to end of quarter? Are there any sort of like impaired stories there? Or is it more market fluctuations? And then, as we think out, you've given us some commentary on big specific transactions like Medline, but maybe just philosophically, how should we be thinking about the realization pipeline in terms of strategic versus financial sponsors versus IPOs? What's the historical mix? What would you expect going over into the next couple of years?
Ben, it's John. Your question is clearly about corporate private equity. Similar to realizations, I believe it's important to assess performance over multiple quarters. It's challenging to draw conclusions from any single quarter, and this quarter doesn't really warrant extensive commentary due to some volatility in the public markets. However, when I evaluate the performance of corporate private equity, especially in the U.S., I'm quite pleased. CPA has increased approximately 15% in the past year. More crucially, the operating metrics within the U.S. portfolio show continued strength. Revenues have risen nearly double digits, and EBITDA has grown by 8%. I'm optimistic about the underlying operating performance of our individual portfolio companies. We are an exception when it comes to realizations; the level of realization activity we're experiencing indicates strong performance. It's vital to understand that. Our teams remain committed to both performance and realizations. The volatility you've mentioned was primarily confined to our CAP franchise, where we have a significant proportion of assets in public securities which have seen some fluctuations. Nonetheless, we own very solid companies. I have no long-term concerns regarding our investments in Asia. In the U.S., CP VII has experienced some public market volatility as well, particularly with StandardAero and Hexaware, which were down from the previous quarter. However, looking at their current status, we've already recovered most of the decline for both StandardAero and Hexaware. They are both excellent companies, so I have no long-term concerns about the public securities in our U.S. private equity business.
And our next question will come from Kenneth Worthington with JPMorgan.
John, it's been a pleasure working with you. Best of luck back in buyout. Justin, I'm sorry, John has set a pretty high bar here. When looking at credit, the Unum block hit this quarter, so congrats. At the same time, we saw the most significant level of credit, I'll call it, distributions in both AUM and fee-paying AUM. Can you talk about the dynamics that drove the outsized, I guess, distributions this quarter? I don't know if it was Unum related or something else, recurring, doesn't recur, anyway? Any flavor would be helpful.
Yes, Ken. I would describe this as part of our regular business operations. It's a good time to capitalize on some of our investments, particularly on the opportunistic side. Whenever we have the chance to achieve strong results for our investors, we definitely seize that opportunity. Additionally, this is part of the organic flow of our CLO business, which our team has managed exceptionally well over the past couple of years. Two years ago, around 40% of our CLOs were in runoff, but since then, the team has executed 41 resets, reducing the runoff percentage to just 12%. It's important to note that when you reset a CLO, it can affect the numbers. So, there's nothing particularly concerning, and nothing specific in the insurance side, just the usual process of raising new capital and realizing investments for our limited partners.
And the next question is going to come from Patrick Davitt with Autonomous Research.
Obviously, been a perfect storm for secondaries here for a while now. But to your point earlier, it feels like the realization window is opening up a bit, though in fits and starts. How are you guys thinking about the sustainability of the so-called golden era in secondaries if the realization window keeps opening up?
Yes, let's take a moment to reflect on why we refer to it as Carlyle AlpInvest Solutions. The entire business is experiencing consistent growth, not only due to the secondaries activity but also because of the wider range of capabilities we offer on our platform. Although the business is often shorthand referred to as secondaries, it actually provides a comprehensive suite of solutions, including secondaries, co-investments, and various corporate finance solutions. We've pointed out some trends in credit secondaries and co-investments, highlighting the evolution occurring in our industry. As the industry matures and private capital becomes central to funding, there's an increasing demand for liquidity tools, making Carlyle AlpInvest a key provider of these solutions. When we focus specifically on secondaries, statistics indicate that the demand for secondary capital will rise over the next few years, which is reflected in our pipelines and client interactions. It's important to clarify that this isn't primarily about distressed portfolios or sellers unable to find buyers; it's increasingly about capital allocation and repositioning. Therefore, discussions with CEOs or CIOs often center on how to effectively reposition their portfolios. We should consider this a core aspect of a broader range of corporate finance solutions. In terms of secondaries alone, the outlook remains positive.
And the next question will come from Michael Cyprys with Morgan Stanley.
Wanted to ask about ABF. I think you mentioned a $10 billion platform today. I was hoping you could elaborate on some of the steps you're taking to expand the platform to accelerate growth. How you see this platform contributing as you look out over the next 12 to 24 months?
Yes, it's Justin. We're very excited about the ABF platform we've developed. It began as a partnership with Fortitude and has grown from there. We have several partnerships with origination platforms contributing to that portfolio. We've seen significant interest from outside the insurance sector, although ABF has traditionally been an insurance product. We are currently exploring some vehicles with various partners beyond the insurance space to broaden that business. We're at $10 billion today, and it's gaining momentum. I believe this is one of the most promising growth areas in our credit business. Steve has done an outstanding job, and as we approach the fourth quarter of 2026, I see considerable potential for this platform.
I show no further questions in the queue at this time. I would now like to turn the call back over to Daniel for closing remarks.
Thank you, everyone, for your time today. If you have any further questions, feel free to follow with Investor Relations. We look forward to talking to you next quarter.
This concludes today's conference call. Thank you for participating. You may now disconnect.